Axis Bank is the third largest Private bank in India.
It has been performing consistently well in the last 3-4 years.
In the latest Q/E 31.03.2010, it has again performed excellently - much better than the last 3 quarters of the year.
QUARTERLY RESULTS :
Its net profit rose by 31.54 % to Rs 764.87 Cr in this Quarter.(Rs.655.98 Cr in previous Qtr and Rs.581.45 Cr in same Qtr last year))
Total income stood at Rs 3,921.99 Cr for this quarter(Rs.3,871.74 Cr in previous Qtr and Rs.3884.73 Cr in same qtr last year).
The bank has earned an interest of Rs 2,988.45 Cr (Rs.2883.65 Cr in last Qtr; and Rs 3,039.22 Cr in same Qtr last year).
During this quarter, the bank reported a growth of 28% in its loan book, much higher than the rate of 17% clocked by the industry, after its loan growth had slipped to 12.5% in q/e December ’09.
Net accretion to the bank’s loan book was Rs 19,573 Cr, compared to Rs 3,726 Cr in previous quarter. The Bank saw higher demand for loans and increase in limit utilization by a few Corporates.
Axis Bank has maintained its asset quality by focusing on secured credit, which includes mortgages and auto loans. The percentage of Gross to Net NPAs as at the end of 31.03.2010 is 0.36 compared 0.46 last qtr end and 0.35 as on 31.03.2009. The Bank has made considerable progress in reducing this ratio from 0.46 to 0.36
The bank opened 86 more branches in the quarter to boost its share of CASA deposits. Axis Bank closed the quarter with 46.7% of its total deposits under CASA against HDFC Bank’s 49%. This is a creditable performance for Axis. Current and saving accounts (Casa) grew over 40 per cent y-o-y and demand deposits averaged 42 per cent of aggregate daily deposits in 4th quarter, compared to 35 % during the year-ago period.
ANNUAL RESULTS :
The consolidated interest earned for y/e March 31, stood at Rs 11,639.05 Cr compared to Rs 10,829.11 Cr last year.
Axis has improved its net interest margin (NIM) by 72 basis points on a year-on-year basis, at 4.09% in the March ’10 quarter. The challenge for the bank would be to ensure that the NIM doesn’t fall below 4% in the near term.
The income boost, along with 20 % growth in fee income in 2009-10, vaulted NPT for full year by 39 per cent to Rs 2,478.14 Cr (Rs.1812.93 Cr last Year), while NPT in 4th quarter surged 31.55 % to Rs 764.87 Cr.
Total deposits grew 17 %. Advances grew 28 % YOY to Rs 1,04,343 crore.
Axis bank has recommended a reasonable dividend of Rs 12 per share (120 percent) for the year.
Going ahead, Axis Bank is targeting balance-sheet growth of 25 % in 2010-11. Regarding NIMs, the management expects a material correction of 40-50 basis points over the next two quarters, as lending rates are expected to remain soft, while the cost of deposits is likely to creep up.
Other Details : Figures in Cr. last year figures are within Brackets:
Result Period 01-APR-2009 to 31-MAR-2010 (Annual)
Result Type Audited, Cumulative, Consolidated (in Cr)
Total Income : Rs.15603.26 Cr (Rs.13745.04 cr)
Total Expdtr. excl,prov.and contingencies: Rs.10395.02 Cr(Rs.10022.72 cr)
OPT: Rs. 5208.24 Cr (Rs.3722.32 Cr)
Provisions (other than tax) and contingencies : Rs.1389.19 Cr(Rs.939.68)
Net Profit (+) : Rs.2478.14 Cr (Rs.1812.93 cr)
Face Value (in Rs.) 10.00
Paid-up Equity Share Capital 405.17
Reserves excluding Revaluation Reserves : Rs.15583.77 Cr( Rs.9835.49 Cr)
Basic EPS before Extraordinary items (in Rs.) 64.83 (50.54)
Diluted EPS before Extraordinary items (in Rs.) 63.38 (50.21)
Basic EPS after Extraordinary items (in Rs.) 64.83 (50.54)
Diluted EPS after Extraordinary items (in Rs.) 63.38 (50.21)
PRICE EARNING RATIO : The Annual EPS of 64.83 (BEPS) compares favourably with the last year’s 50.54. At the current Market price of around Rs.1223, the P/Es works out to hardly 18.86, while its peers have a P/E of around 25.
FUTURE EPS : Its latest Qtr EPS is 18.92 against 16.29 last Qtr and 16.10 same qtr last year.Thus, we can expect a annual EPS of around 76 - 78 ( 19 x 4) next year at current levels of performance. This makes the P/E hardly 16, which is considered quite LOW.
Viewed against its consistent Performance in the last several years, and its confidence in the future years’ performance, Axis Bank appears to deserve a much higher valuation than at present.
FUTURE EPS : Its latest Qtr EPS is 18.92 against 16.29 last Qtr and 16.10 same qtr last year.Thus, we can expect a annual EPS of around 76 - 78 ( 19 x 4) next year at current levels of performance. This makes the P/E hardly 16, which is considered quite LOW.
Viewed against its consistent Performance in the last several years, and its confidence in the future years’ performance, Axis Bank appears to deserve a much higher valuation than at present.
Note : While every effort is taken to present data and views with accuracy, readers do need to consult the NSE and company web sites etc before making decisions on investment.
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